how DSCR loans work
No personal income required. DSCR lenders qualify the property, not you. They look at the rental income relative to the monthly PITI (principal, interest, taxes, insurance). W-2s, tax returns, and DTI are irrelevant.
Qualification based on rent. If the rent is at or above 1.0–1.25× the full mortgage payment, you qualify. Most lenders set the bar at 1.20–1.25 DSCR. Some go down to 0.75 with rate adjustments.
Credit score still matters. Most DSCR lenders require 620–680 FICO minimum. Better credit unlocks better rates — 740+ gets the most competitive pricing.
Minimum 20–25% down. DSCR loans typically max at 75–80% LTV on purchases. Cash-out refinances cap at 70–75% LTV. Some lenders allow 80% on rate-and-term refis.
requirements at a glance
| requirement | standard range | notes |
|---|---|---|
| min DSCR | 1.20–1.25 | some lenders allow 0.75–1.0 at a rate premium |
| min credit score | 640–680 | best rates at 740+ |
| down payment | 20–25% | LTV 75–80% max on purchase |
| cash-out refi LTV | 70–75% | some lenders offer 80% R&T refi |
| property types | SFR, 2–4 unit, condo | 5+ units = commercial DSCR |
| rates (2026) | 7.5–9.5% | 30-year fixed or ARM available |
| loan minimum | $75k–$100k | varies by lender |
| seasoning for cash-out | 6–12 months | some lenders waive for delayed financing |
DSCR vs. conventional
| factor | DSCR loan | conventional |
|---|---|---|
| income verification | none — based on rent | W-2s, tax returns, DTI |
| self-employed? | irrelevant | 2 yr business returns required |
| property cap | unlimited | max 10 financed |
| close speed | 15–25 days | 30–45 days |
| interest rate | 0.5–1.5% higher | lower for W-2 borrowers |
FAQ
can I use projected rent on a vacant property?
Yes — most DSCR lenders accept an appraiser's market rent analysis (form 1007 or 1025). You don't need a signed lease.
STR (Airbnb) income — usable?
Yes. Some DSCR lenders allow short-term rental income, typically using 75% of trailing 12-month gross or a market rent estimate, whichever is lower.
does the property need to be in an LLC?
No. DSCR loans close in personal name or LLC. Some lenders prefer LLC for asset protection. Expect ~0.25–0.50% rate premium for LLC vesting.
what if my DSCR is below 1.0?
Some lenders offer "DSCR below 1" programs down to 0.75 with higher rates and tighter LTV. Or reduce loan size — a larger down payment lowers the payment and improves the ratio.